If you’ve been looking for School Store Supplies or discount stationery in your area, then right now you’re probably feeling like you’ve stumbled onto the set of Carry On At The Circus. It’s difficult to get a read on what’s the right price to pay for pens, paper, printer ink or biscuits – particularly when you’re ordering in large quantities. Whomever your supplier is, you’re prone to achieve massive savings over high-street prices.
On the other hand, you can still find yourself paying 2 to 3 times on the odds. A price reduction promotion or buy-one-get-one-free offer is really a warning signal, and more than likely forms a part of a pricing strategy which will look at you paying more for stationery and office supplies.
If you’re a monetary director or office administrator, you might be clued in to the big secret – but for the remainder of us, here’s the main one secret that’s planning to wipe off as much as half your office supplies expenses in a single swift movement:
Stop searching for discounted office supplies
It’s not really a call to arms over quality control – for many situations, it could even be appropriate to get the cost option as opposed to the high-end one. Nor is it about wastage and logistical planning, although proper cost analysis is a crucial component of managing your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, basics of pricing. Although there are complicated concepts at work, it comes down to simple human nature.
We’re hard-wired to travel following the option with all the big shiny ‘discount’ sticker on the front – even when it’s more expensive. It’s a bizarre little quirk of the brain, and something that’s hard to switch off – as US retailer JC Penney discovered to their ongoing regret.
In 2012, the supermarket giant announced that they were putting a conclusion with their promotional pricing strategy, which saw everyday staples with a permanent discount. Like the majority of supermarkets, JC Penney was artificially inflating their shelf prices before offering them an arbitrary discount. Occasionally, a 50% discount was actually a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to a different, ‘honest’ system of pricing with no fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or any other shifty tactics. The newest system was intended not only to lower prices, but to aid consumers make informed decisions regarding their groceries and budgets. The fact that Honourable Ron became Jobless Johnson within less than a year probably tells you how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a feeling of anger over whatever they perceived as a betrayal; revenue and share price went into freefall; and also the company quickly returned to their previous strategy of artificial markdowns. When offered the same products having a lower pricetag, customers still preferred to pay the greater price – so long as it enjoyed a discount sticker onto it.
In fact, JC Penney customers were so offended from the disastrous strategy that brand loyalty not only went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The sgzvks actually issued an apology to jilted shoppers, but the client base stayed away until prices were raised – in some instances greater than they originally were. A niche commentator had this to say:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it has discovered is the fact that prices of certain items-designer furniture, in particular-have risen by 60% or more at JC Penney almost overnight. One week, a side table was listed at $150; a couple of days later, the “everyday” price for the same item was as much as $245.”
Discount pricing strategies are virtually par for your course on the high street – and, since the BBC uncovered, most of them are as arbitrary and misleading as JC Penney’s. And, in most cases, they can make sense coming from a B2C perspective. The Chartered Institute of Marketing claims that attention spans are limited to 8 seconds, rather than the 12 seconds that they were in the early 2000s.
We are now living in the data age: a realm of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers want to make decisions quickly based upon limited information. Discounting is an immediate recognisable signal that a wise purchasing decision has been made, (whether true or otherwise not).
For somebody involved with B2B procurement, however, discount pricing ought to be public enemy primary. Unfortunately, every workplace from the local chip shop to the state of New York City has at once or any other fallen victim to the same ruses that operate in the supermarket.
Promotional pricing strategies at the office. It’s often said disparagingly of politicians which they don’t know the cost of a pint of milk, (or in the case of the mayor of the latest York, the price of a pen and paper). In every honesty, however, none of us do.
Milk, bread, as well as other staples are typically far cheaper than they must be – for a variety of reasons:
They might be used as a loss leader, to attract in customers who’ll then pay more for other considerations.
They may be inferior-quality versions employed to undercut competitors.
They might be bundled with other items as part of an up-sell; sandwich-drink-and-snack deals at lunchtime are a wonderful example, but you can find invisible examples like coffee strainers and coffee (or ink and printers).
They may be used to build trust or complacency within the shopper, that will often judge all the prices of the retailer based on the first or most frequent items that they purchase from them.
They could use tricks of human perception – like charm pricing (like.9 or.7); pricing under benchmarks (like £1, £5, £10 and so on); or even just including information that looks relevant but isn’t. A thing that is advertised as “Only £1.99 whenever you buy 2!” may appear to be a price reduction, however if the single unit costs £0.99 then it’s actually more costly.
All the tricks outlined above, utilized for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that for yourself with just a couple minutes of searching – or checking your latest receipt.
In everyday life there’s very little we are able to do about this kind of obfuscation. Not many folks have the time, resources or inclination to research and compare grocery prices with an item-by-item level – and also the opportunity costs of rushing from supermarket to supermarket in the quest for the least expensive potatoes by gross weight in reality probably outweigh the rewards. That’s why JC Penney’s customers are slowly returning because the prices are rising.
A company facing similar purchasing options, however, has the main benefit of an economic director to guard its decision-making process.
There’s still scope, even or possibly specifically in age of information, to have someone on staff who can perform considered, researched procurement. Somebody who can take time to perform a proper cost analysis; engage in slow thinking; are available to a conclusion according to facts instead of on sound and fury.
While honesty didn’t exercise very well for Ron Johnson, we at CP Office still believe that it’s both worthwhile and worth a try. So, unlike a number of other stationers and vendors of Wholesale Distributors, we choose to provide an impartial cost analysis to our potential customers, as well as the benefit of our genuinely competitive prices. With CP Office, there’s no fuss without any tricks – just an honest discussion about what’s right for you as well as your office.